Funding Dries Up for Medical Startups

Companies Are Squeezed by Venture-Capital Drought

The medical-device industry, struggling to adapt to a thriftier health-care system, is getting squeezed by a venture-capital drought.

Investment in the medical-device and equipment industry is on pace to fall to $2.14 billion this year, down more than 40% from 2007 and the sharpest drop among the top five industry recipients of venture funding, according to an analysis of data compiled by PricewaterhouseCoopers and the National...